Analysts said this week that worried investors should strengthen their portfolios with stocks that have the best chance to withstand market volatility and represent good buying opportunities over the long term. These companies have certain characteristics that Wall Street analysts believe will allow them to come out on the other side of the turmoil. CNBC Pro sifted through the best Wall Street research to find some of the top stocks to buy for the long term. These include ServiceNow, Pinterest, Wheels Up, Victoria’s Secret and Coinbase. Shares of Pinterest are down 75% over the past year, but investment firm Loop Capital says don’t give up on the stock just yet. “While signals are mixed and advertisers are more tentative, we see little evidence of a meaningful and broad-based pullback in our checks so far,” wrote analyst Rob Sanderson. Some near-term headwinds are to be expected, the analyst said, especially after fellow social media giant, Snap, warned in late May that it would miss some earnings targets for the quarter. “While macro concerns remain high, we think near-term expectations are reasonable,” Sanderson said. Still, Sanderson said investors should buy Pinterest stock. The firm sees a number of positive catalysts that investors may not be aware of. For example, Sanderson is set to ramp up shopping on its platform for Pinterest. He called it an undefined yet “meaningful” opportunity. “Shopping activity and GMV (gross margin value) have expanded meaningfully in the three years since the IPO,” he said. Idea Pins, which allows users to create short story-like video indexing clips, has dragged down revenue growth, but Sanderson sees the upside in the longer term. The bottom line is that “the long-term opportunity remains bright,” he wrote. Coinbase continues to drive bitcoin investors to around $20,500 with a drop of more than 20% over the past week. Meanwhile, shares of crypto company Coinbase are also down about 80% this year. But JMP analyst Devin Ryan says there’s still a lot to like about the stock despite the volatility. The firm says that Coinbase is still “well positioned to face a very challenging moment in the market” and is picking up stakes from even lesser competitors. “We believe crypto adoption is being tested, but not broken,” he said. Ryan reminded investors that Coinbase is indeed an exchange with an excellent balance sheet and almost no risk to lend. Coinbase is one of the “best houses on the block in no time at all,” he wrote. Not every digital business will survive, Ryan acknowledged, but Coinbase presents “a long-term opportunity for strong businesses to gain shares and set themselves apart from the pack,” he said. The analyst said in his view that macro factors are indeed responsible for the recent crypto sell-off. “Ultimately, the current environment underscores the value of businesses that can provide security and soundness in difficult market conditions,” Ryan wrote. Coinbase is the right stock at the right time, the firm said. Wheels up Goldman Sachs is doubling down on private airline stocks. The firm began coverage of the stock earlier this week with a buy rating and a price target of $5 per share. Demand remains strong for Wheels Up Services and analyst Noah Poponak called the total addressable market “significant”. “The pandemic has proven to be a catalyst for accelerating the adoption of personal travel, and as Wheels Up grows its business model and benefits from technological efficiencies, it is looking to grow even more through smart supply and dynamic pricing. Could unlock demand,” he wrote. However, investors need to be patient and watch out for any near-term adverse conditions, the analyst said. Shares are down about 44% this year and Poponak sees an “attractive entry point.” “The business has significant expansion potential for normal margins and cash flow, which are not that far off,” he said. The firm said the market is unnecessarily skeptical about the long-term adoption of private jets. “Big long-term opportunity,” Poponak said. Victoria’s Secret- Jefferies, Buy Rating “VSCO is on track of recovery, with increasing sales momentum and improving brand sentiment. While the company’s initiatives are working, near-term top-line trends will be partially offset by supply chain headwinds.” While we do not expect a linear recovery, we believe VSCO’s long-term opportunity remains unchanged, and we expect VSCO margins to remain unchanged. Able to recapture lost sales while recovering. Pinterest- Loop, Buy Ratings “Long-term opportunity remains bright. …. Although signals are mixed and advertisers are more tentative, we see little evidence of a meaningful and broad-based pullback in our checks so far. , While signals are mixed and advertisers are more likely, we see little evidence of a meaningful and broad-based pullback in our investigation so far. … .While macro concerns remain high, we believe near-term expectations are appropriate. … .Shopping activity and GMV have expanded meaningfully in the three years since the IPO.” ServiceNow- Deutsche Bank, Buy Ratings “We attended ServiceNow’s Knowledge 2022 User Conference and Financial Analyst Day in Las Vegas last week Lea and felt good about the company’s long-term opportunity and relative strength in a difficult background. As many software companies begin to show signs of a decline in the macro, ServiceNow remains strong so far, which appears to be the result of multiple forces.” Wheels Up – Goldman Sachs, Buy Rating “Significant TAM Opportunity. , The pandemic has proven to be a catalyst for accelerating the adoption of personal travel, and as Wheels Up benefits from its business model and technological prowess, it could unlock even greater demand. Through smart supply and dynamic pricing. , The business has significant expansion potential for normalized margins and cash flow, which are not far off. , Big long term opportunity. “Coinbase – JMP, Market Outperform Rating We believe crypto adoption is being tested, but not broken. … .these moments for strong businesses to gain shares and set themselves apart from the pack represent a long-term opportunity. Confidence in the platform is still needed to support investments in COIN shares, but we note that the company is one of the best houses on the block in uncertain times, incredibly liquid and we are currently I believe COIN is well positioned for a very challenging moment in the market and potentially also pick up market share from weaker competitors who are unprepared for a market downturn. ….after all, the current environment for those businesses underscoring the value of those that can provide security and soundness in tough market conditions.”
